Shares in Pinterest rose more than 20 percent after hedge fund Elliott Investment Management revealed itself as the company’s largest shareholder and voiced support for its new CEO.
The announcement helped offset Pinterest’s disappointing second-quarter results that reflected softness in the digital advertising market, which has hit several of its social media rivals.
“Pinterest is a highly strategic business with significant growth potential, and our belief in the value creation opportunity in Pinterest has led us to become the largest investor in the company,” Elliott said in a statement. Monday.
In July, the Wall Street Journal reported that Elliott had amassed a stake of more than 9 percent in the company.
The Florida hedge fund said Bill Ready, Pinterest’s new CEO, was the “right leader” to oversee the company’s next phase of growth. Ready joined in late June and previously led the commerce and payments division at Google.
Pinterest shares rose 21.7 percent in after-hours trading on Monday to a four-month high of $24.32.
The jump in share prices comes despite disappointing second-quarter results released by the company on Monday. Pinterest’s revenue rose 9 percent to $665.9 million, roughly in line with analysts’ forecasts. But expenses rose 29 percent from a year ago and its net loss of $43 million in the quarter missed Wall Street expectations for a profit of $30 million.
Recent reports that Elliott, with its reputation as a formidable activist investor, was building a stake in PayPal boosted the payments company’s share price last week.